The Historic Broadway Theatre District

is a great place to set up shop!

We actively encourage new businesses to fill vacant spaces along Broadway, in the heart of one of the most important historic districts in our city. To help make your decision to be a part of Bringing Back Broadway even easier, Councilmember José Huizar is pleased to share a variety of business incentives which are available to new and existing businesses on Broadway, which you and your accountant will want to examine closely and take advantage of.  After following links, for further information on any of these programs, please contact Executive Director Jessica Wethington McLean at Jessica.WethingtonMcLean@lacity.org or 213-473-7014. We will be pleased to direct you to the right place to have your questions answered and get assistance you need to do business on Broadway.

 

INCENTIVES FOR BROADWAY BUSINESSES

 

 

BUSINESS TAX EXEMPTION FOR FIRST THREE YEARS OF OPERATION
New businesses on Broadway will be exempt from gross receipt taxes, applicable minimum tax or any additional business tax for the first three years of operation. A new business is one that has not previously paid business tax receipts in the city of Los Angeles. Businesses currently operating in the city that should have filed for a business tax registration certificate in prior years are not qualified.

 

ENTERPRISE ZONE INCENTIVES
Broadway is part of a State Enterprise Zone with incentives available to new and existing businesses on businesses on Broadway.  www.ci.la.ca.us/CDD/bus_statecred.html 

  • EMPLOYER HIRING CREDITS: Up to $37,440 over a 5-year period per each qualified employee can be claimed by Broadway businesses as a tax credit. An employee can qualify under any one of 13 different categories.

 

  • SALES AND USE TAX CREDITS: Broadway businesses can receive a tax credit of 100% of the sales/use tax paid for equipment purchases for use in the zone. Machinery, machinery parts, telecommunications equipment and office equipment such as copiers, printers, fax machines and telephone systems also qualify.

 

  • BUSINESS EXPENSE DEDUCTION: An accelerated depreciation is available for tangible personal property the first year it is placed in service on Broadway. Office supplies and inventory do not qualify. Limits: $20,000.

 

  • NET OPERATING LOSS CARRYOVER: 100% of Net Operating Losses may be carried forward for 15 years to reduce the amount of taxable income for those years.

 

  • DEPARTMENT OF WATER AND POWER RATE DISCOUNT: The Department of Water and Power offers a five-year electric rate discount to new businesses that are moving onto Broadway and which apply within 18 months for the discount. Existing businesses whose energy consumption in the 6-month period before the date of application was at least 35% greater than the monthly average in the prior 12 months also qualify.

 

  • SEWER FACILITY CHARGE EXTENDED PAYMENT OPTION: The City allows Broadway businesses to qualify for a one-time lump sum payment exemption if the Sewer Facility Charge is over $17,000. The fee can be paid in installments over five years but interest is payable on any unpaid balance.

 

  • REDUCED PARKING ORDINANCE: This ordinance provides reduced parking requirements for Enterprise Zone businesses compared with other areas of the City.  This would only apply if there were parking requirements to be met, which in many cases on Broadway there would not be due to the historic nature of the buildings which were built without parking.

 

  • NET INTEREST DEDUCTION: Lenders can earn tax-free interest on loans made to Broadway businesses.

 

WORK OPPORTUNITY TAX CREDIT
www.edd.ca.gov/jobs_and_training/Work_Opportunity_Tax_Credit.htm
The Work Opportunity Tax Credit (WOTC) is a federal tax credit which allows for hiring credits of up to $2,400 per year for each eligible hire by businesses which hire individuals between the ages of 18-39 who qualify as a member of a target group with particularly high unemployment rates or special employment needs and / or who reside in either the Federal Empowerment Zone (EZ) or the Federal Renewal Community (RC) area. The individual must be retained for a min of 400 hours to receive a 40% credit or between 120-400 hours to receive a 25% credit.  Tax credit varies by group. Generally, credit is equal to 40% of qualified first-year wages up to $6,000 ($2,400 credit), if the individual is retained for 400 hours. Employers who do not take the full credit amount due to tax liability limitation may carry back one year or forward 20 years.

 

USE TAX REBATE PROGRAM
Offers businesses a rebate of 20% on the additional Use Tax collected by the California State Board of Equalization for the City of Los Angeles. Businesses that pay Use Tax to lessors or out-of-state vendors are eligible. This additional Use Tax is equivalent to about 67.5% of the 1% of the Use Tax allocated to the City of Los Angeles that you pay to your vendor. Contact: City of L.A. Office of Finance, Ed Cabrera
213-978-1516, ed.cabrera@lacity.org

 

HOSPITALITY EXPRESS PROGRAM (FOR RESTAURANTS AND HOTELS)
This multi-agency Case Management program includes L.A. County Health Department, Bureau of Sanitation, City Planning Department, Fire Department, and Bureau of Engineering. Its purpose is to provide assistance navigating and streamlining the city’s permitting process for hospitality businesses, restaurateurs and their design/construction teams.  Bringing Back Broadway will be happy to facilitate this process.  Contact:  Jessica.WethingtonMcLean@lacity.org with Bringing Back Broadway.

 

WASTE ASSESSMENT PROGRAM
Offers free business waste assessments aimed at increasing recycling and reducing waste generated by businesses located in the City of Los Angeles, which may help save money on waste disposal costs. Available to any business located in the City of Los Angeles. City staff provides complimentary waste assessments and technical service to Los Angeles businesses to help them divert recyclable material and reduce their disposal costs. Contact: Bureau of Sanitation, David Cheung, 213-485-2423, david.cheung@lacity.org

 

COMMERCIAL WATER CONSERVATION REBATE PROGRAM
LADWP, through a partnership with the Metropolitan Water District (MWD), offers a number of rebates to encourage water efficiency and conservation through the Save Water, Save a Buck program. Commercial, industrial and institutional customers that purchase and install qualified devices, fixtures and technologies are eligible for cash rebates, which vary by device and whether the application is retrofit or new construction. Contact: Department of Water & Power (LADWP), Mark Gentili, Water Conservation Supervisor, 213-367-8556, mark.gentili@ladwp.com

 

COMMERCIAL SOLAR POWER INCENTIVE
Provides one-time incentive payment to new and existing LADWP customers that purchase and install eligible solar power photovoltaic (PV) systems. Available to all new and existing LADWP customers. Individual solar powered systems must meet certain installation requirements and equipment must be UL-certified components listed by the California Energy Commission. All solar installations require a Building & Safety permit. A one-time incentive payment is based on an estimated 20-year output/performance of the solar system, up to 50% of the total system cost (for commercial customers) or 100% of the annual historical consumption. Contact: Department of Water & Power (LADWP), Solar Energy Group, 213-367-4122, solar@ladwp.com

 

SEWERAGE FACILITIES CHARGE INSTALLATION PAYMENT PROGRAM
Provides an installment payment program as an alternative to a lump sum payment for sewer customers that require new/additional sewer capacity for their properties. A property is eligible is it is an individual site in which the Sewerage Facilities Charge due equals or exceeds $17,000 ($5,000 charitable institutions). Customer can reduce initial start-up expenditures. Plan would allow a 15% down payment of $2,718 with quarterly payment of $820 with 6% interest rate over the 5 - year period.  Contact: Bureau of Sanitation, David Cheung, 213-485-2423, david.cheung@lacity.org

 

LOS ANGELES COMMERCIAL BUILDING PERFORMANCE PARTNERSHIP (ENERGY UPGRADES)
www.lacommercialbpp.com
The L.A. Commercial Building Performance Partnership (LACBPP) is an ARRA-funded initiative that offers a suite of free resources to help upgrade buildings to make them more energy efficient. Incentives include up to $250,000 in free engineering services from top-tier independent firms, free facilitated access to a number of LADWP and SoCal Gas rebates and incentives to assist with energy efficient system installation and upgrades, as well as state and federal tax incentives such as EPAct 179D, and free introductions to innovative project financing options. 

 

UTILITY INFRASTRUCTURE LOAN PROGRAM
Provides loans to new and existing local businesses in Los Angeles for design, equipment purchase, and construction of water conservation, energy-efficiency, utility infrastructure, and solar energy projects.  Funding is available for new and existing DWP customers with good credit and/or bill payment history. Eligible infrastructure expenditures include conduit systems, manholes, vaults, poles, wiring, transformers, capacitor banks, panels, valves, pipes, and other equipment or facilities necessary electric energy or water service from DWP. Contact: Department of Water & Power: Belu Onyedika, 213-367-3770, Belu.Onyedika@ladwp.com

 

NEW MARKET TAX CREDITS:
Properties on Broadway may be eligible for New Market Tax Credits and/or Historic Tax Credits.  The Los Angeles Development Fund (LADF) is a California non-profit and certified Community Development Entity (CDE) established by the City of Los Angeles to administer its New Markets Tax Credits (NMTC) program. The LADF received a $75 million NMTC allocation in the 2007 funding round. The LADF is committed to using its NMTC allocation to stimulate economic development in low-income communities throughout the City of Los Angeles. The LADF will target its allocation toward projects that generate maximum economic and community benefits for the residents living in the City’s economically distressed communities, promoting job and wealth creation and advancing the principles of sustainable building design and responsible land use.
 
The NMTC program, administered by the U.S. Department of the Treasury, permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated CDEs. As a certified CDE, the LADF acts as the bridge between the capital markets and low-income communities by taking the investment capital that it receives and lending it to qualified projects.

The Community Redevelopment Agency of the City of L.A. (CRA/LA) is the approved management agent for the LADF. The CRA/LA provides administrative and management services to the LADF and is responsible for overseeing all aspects of the NMTC program.  Contact: Sandy Rahimi, (213) 977-1832, srahimi@cra.lacity.org

 

HISTORIC TAX CREDITS:
www.nps.gov/tps/tax-incentives/taxdocs/about-tax-incentives.pdf
Properties on Broadway may be eligible for New Market Tax Credits and/or Historic Tax Credits. 

  • 20% Historic Tax Credit: A 20% income tax credit is available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures.” The State Historic Preservation Offices and the National Park Service review the rehabilitation work to ensure that it complies with the Secretary’s Standards for Rehabilitation. The Internal Revenue Service defines qualified rehabilitation expenses on which the credit may be taken. Owner-occupied residential properties do not qualify for the federal rehabilitation tax credit. Learn more about this credit before you apply. Each year, Technical Preservation Services approves approximately 1000 projects, leveraging nearly $4 billion annually in private investment in the rehabilitation of historic buildings across the country.
  • 10% Historic Tax Credit: The 10% tax credit is available for the rehabilitation of non-historic buildings placed in service before 1936. The building must be rehabilitated for non-residential use. In order to qualify for the tax credit, the rehabilitation must meet three criteria: at least 50% of the existing external walls must remain in place as external walls, at least 75% of the existing external walls must remain in place as either external or internal walls, and at least 75% of the internal structural framework must remain in place.

 

CITY BUSINESS SUPPORT SERVICES

LOS ANGELES WORKS
www.losangelesworks.org
Comprehensive and searchable web site which guides new, existing, relocation and expanding businesses through the city’s processes and finding incentives.  A resource as part of the Mayor’s Office of Economic & Business Policy.  Contact: Jessica.WethingtonMcLean@lacity.org with Bringing Back Broadway.

 

LABAP (LOS ANGELES BUSINESS ASSISTANCE PROGRAM):
www.ci.la.ca.us/CDD/bus_labap.html
Offers free training and technical assistance to business owners seeking to improve their operations and profitability. It also offers training to people wanting to learn how to open and operate their own small business.  Contact: Miguel Acuna, Community Development Department, miguel.acuna@lacity.org
 
MICROENTERPRISE & ENTREPRENEURIAL PROGRAM
Training for entrepreneurs and small business owners includes screening and assessing participants in order to determine business aptitude and level of interest, in addition to the following course work:
• Financial planning, inventory and cash flow analysis
• Formulation of a business plan
• Establishing a business
• Obtaining a business license
• Incorporating the business
• Developing a marketing strategy, including internet sales and international marketing
• Case management designed to assist with specific needs of small businesses
Contact: Miguel Acuna, Community Development Department, miguel.acuna@lacity.org